Tata Tea intends joining forces with the European Bank of Reconstruction and Development (EBRD) to acquire 51 per cent of Grand, a branding, packing and distribution company in Russia. This deal which, subject to the fulfilment of various conditions, will see the group of beverage companies enter Russia, a market where coffee is becoming increasingly popular and tea is a national beverage.
The outstanding 49 per cent will be retained by the company’s founder and long-term associate of Tata Coffee, Alexander Borisov. Dr Borisov and his current management team will also remain with the company.
Established in 1994, Grand is a major player in the economy segment of the coffee and tea sectors in Russia and is mainly focused on regions outside the big cities and areas like the Urals, Siberia and Southern Russia.
Tata Tea's investment in the company will, amongst other things, finance the modernisation of Grand’s production facilities in order to increase the quantity and quality of their output. This will open the way for new market opportunities.
The vision for Russia involves working with the EBRD to build a multi-million dollar business over the next three years through a combination of acquisitions and brand introductions.